IMPORTANT POINT
When the agreement provided for appointment of two gazetted officers of equal status as arbitrators then Court should give that latitude to contracting party to make appointment but in case appoint is not made in time then power of High Court u/s 11 of Arbitration and Conciliation Act will not be denuded.

JUDGMENT

A.K. Mathur, J. - These appeals are directed against the judgment and order passed by the High Court of Andhra Pradesh. By the impugned order dated 27.4.2001 a batch of writ petitions were disposed of including the one before us whereby the High Court appointed arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter to be referred to as the Act). In the present appeals, we are concerned with Writ Petition No.2465 of 2001 [ Union of India & Anr. v. M/s. V.S. Engineering (P) Ltd & Anr.]. So far as order dated 27.4.2001 passed by the Division Bench of the High Court is concerned, all the issues raised in that order has already been decided by this Court in the case of SBP & Co. v. Patel Engineering Ltd. & Anr. [ (2005) 8 SCC 618] by a seven Judge Bench of this Court. Therefore, no purpose will be served by examining the validity of the order of the Division Bench of the High Court challenged in this present appeal as all issues are covered in the decision of SBP & Co. (supra), therefore this appeal is accordingly disposed of in the light of the aforesaid decision.

2. Brief facts giving rise to another appeal are that M/s. V.S. Engineering Private Limited, Hyderabad was awarded the work of supply and stacking of 50mm machine crushed stone ballast at Nallapadu Depot and loading the same into B.T. Wagons by Mechanical/ Manual means for a quantity of 1.8 lakh cum at the value of Rs. 5,02,20,000/-. The agreement No.GM/W/SC/93/2 providing payment of mobilization advance and machinery and plant advance was executed by the contractor on 19.4.1993. The completion period was 39 months as per the acceptance letter dated 27.1.1993. As per the agreement the work was to be commenced from 26.4.1993 and completed by 26.4.1996 supplying the ballast at the rate of 60,000 cum per annum. As the contractor could not commence the work as per the tender conditions and supplied only 88214 cum up to November, 1997 penalty for an amount of Rs. 1,01 crore was recovered from the running bills of the contractor. The appellant did not agree to the request of the contractor for waiver of penalty and rescheduling of supply. Therefore, a dispute arose between the parties and the contractor sought appointment of an arbitrator under clause 64 of the General Conditions of contract. In pursuance of the contractors demand the Arbitral Tribunal was appointed to adjudicate the contractors claim. The Arbitral Tribunal initiated the proceedings and the contractor submitted his claim statement before the Arbitral Tribunal. Subsequently, the contractor filed an arbitration application No. 60 of 1998 dated 16.10.1998 before the High Court of Andhra Pradesh at Hyderabad under section 11 of the Act, seeking appointment of an Arbitrator to resolve the dispute emanating from the agreement dated 19.4.1993. The appellant- Union of India contested the arbitration application filed by the respondent by filing a counter and denying the allegations. It was pointed out that it was wrong to say that the payment was not done for the work done. It was alleged that the payment was made as per the terms of the contract and there was no delay on the part of the Railway. It was also contended that the request for referring the dispute for arbitration has to be done in accordance with Clauses 63 & 64 of the General Clauses of Contract. As per Clause 63, on receipt of the application the Railway had to notify the decisions on all matters including the matters which came up under the caption excepted matters. The respondent subsequently made a request for referring the matter to Arbitral Tribunal, The General Manager of the Railways as per Clause 64 of the General Conditions of Contract accepted the request of the respondent for referring the dispute to the Arbitral Tribunal and accordingly, a letter was sent on 5.5.1998 furnishing four names of Railways Officers out of which the respondent had to nominate up to two names which w